Air ticket prices may rise as DIAL plans to impose airport development fee

NEW DELHI: The country's airport regulator may allow the GMR-led Delhi International Airport (DIAL) to collect the airport development fee (ADF) in a couple of months' time, paving the way for a resumption of the fee collection process which got stalled for a while.

"We will allow DIAL to collect Rs 3,500 crore over 4-4 to 5 years as airport development fee. They have said they will make a further expenditure of Rs 700-800 crore on the airport soon. If they do so, they can collect the ADF for over five years," AERA chairman Yashwant Bhave told ET. The airport developer in Delhi was allowed to collect the fee to cover a funding gap of Rs 1,827 crore when the project cost was estimated to be about Rs 9,800 crore.

But later the project cost escalated to Rs 12,718 crore, and consequently the funding gap jumped to Rs 3,481 crore. To cover this extra gap of about Rs 1,700 crore, DIAL had asked AERA for an extension of two years and eight months, starting March 2010.

However, the Delhi High Court struck down collection of the fee — a mode of capital funding of airport projects — when Consumers Online Forum, an NGO, argued that the fee shouldn't be collected without final determination of ADF by AERA . The NGO was asked to file an appeal before the Appellate Tribunal of AERA within a week.

"All legalities are over as the Appellate Tribunal has also given its go-ahead and nothing is pending from GMR's side. Only AERA's approval is needed now," a GMR source said. Earlier, airlines used to collect the ADF and passed it on to DIAL, but from now on, airlines will have to submit it to the Airports Authority of India , which in turn will pass it on to DIAL, source said.

He added that AERA is expected to detail a procedure whereby the money collected as ADF will go into an escrow account, from where it will go directly to the banks that have extended loans to the airport operator . DIAL used to collect . 200 from domestic passengers and Rs 1,300 from international passengers.